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Legislation seeks to extend applicability of SEC's Reg A+

Joe Mont | September 13, 2017

The House of Representatives, on Sept. 6, approved legislation that intends to expand the Securities and Exchange Commission’s registration exemption under Regulation A+.

In March 2015, the SEC adopted new rules that update and expand Regulation A, an existing exemption from registration for smaller issuers of securities. The updated exemption will enable smaller companies to offer and sell up to $50 million of securities in a 12-month period, subject to eligibility, disclosure and reporting requirements.

The final rules, often referred to as Regulation A+, provide for two tiers of offerings:  Tier 1, for offerings of securities of up to $20 million in a 12-month period, with not more than $6 million in offers by selling security-holders that are affiliates of the issuer; and Tier 2, for offerings of securities of up to $50 million in a 12-month period, with not more than $15 million in offers by selling security-holders that are affiliates of the issuer.

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